Share price drop?

78 replies
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Was there some B&O news out today that caused a 15% drop in the share price?

Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently..

Lee

If your compare first and second quarter reports Beoplay sales are flat.  However the core A/V product sales dropped 25% and automotive dropped 23%.

9 LEE wrote:

Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently.

Maybe I'm wrong, but I'm assuming B&O have to pay for ceasing a dealer's contract, plus buy back stock and fittings?

moxxey wrote:

9 LEE wrote:

Second profit warning.

Closing all the dealers they did/are has proven more expensive than first thought, apparently.

Maybe I'm wrong, but I'm assuming B&O have to pay for ceasing a dealer's contract, plus buy back stock and fittings?

UK seems to have a mixture of franchised dealers and dealerships directly owned by B&O UK. The directly owned dealerships are, I believe, former franchises that failed to meet targets and were handed back under the terms of the franchise contracts. So in the case of the latter, B&O will have been in receipt of a funded operation, albeit with committed running and premises leasing costs.

Leases often run on a 7 year basis, and at the end of the 7 years landlords can be stupid and demand an unrealistic increase, tipping the business into a closing situation and leaving the landlord with empty premises. Presumably, if a franchise store is owned by a limited company, it can fold and default on leasing commitments. If, on the other hand, B&O triggers the closure itself by ending a franchise, you would imagine that they should pay for fittings and other costs. If the franchise is part of a multi AV business and not exclusively B&O, then it must get complicated. I can imagine the most vulnerable stores to be those owned by B&O that are getting near to the end of their premises leases, unless, of course, they are in good locations turning in good profits.

Graham

I see B&O's profit warning is featured in The Times, today. Says they expected to make a profit in 2013, but instead will record a £23 million loss.

Says B&O is blaming a downturn in luxury goods purchasing through Europe and that it has affected B&O's expected recovery.

vikinguk wrote:

UK seems to have a mixture of franchised dealers and dealerships directly owned by B&O UK. The directly owned dealerships are, I believe, former franchises that failed to meet targets and were handed back under the terms of the franchise contracts. So in the case of the latter, B&O will have been in receipt of a funded operation, albeit with committed running and premises leasing costs.

Leases often run on a 7 year basis, and at the end of the 7 years landlords can be stupid and demand an unrealistic increase, tipping the business into a closing situation and leaving the landlord with empty premises. Presumably, if a franchise store is owned by a limited company, it can fold and default on leasing commitments. If, on the other hand, B&O triggers the closure itself by ending a franchise, you would imagine that they should pay for fittings and other costs. If the franchise is part of a multi AV business and not exclusively B&O, then it must get complicated. I can imagine the most vulnerable stores to be those owned by B&O that are getting near to the end of their premises leases, unless, of course, they are in good locations turning in good profits.

Graham

At the moment closures seem to be voluntary rather than B&O enforced.

I know this was a year ago, but and if it's still open good new for emerging markets. 

http://www.youtube.com/watch?v=yEgsPwTqlrA

Guilty as charged.

I was able to negotiate a 15 % discount on a new Beoport yesterday. Just doing my bit to keep the company afloat.

Sorry all.

It's not just the losses that are the issue. A company that works closely with mine is advising B&O on its cash flow. The actual losses (as opposed to the predicted profit) are of course connected to cash flow but liquidity is key to survival and b&o have some issues which i understand may impact on s,e of the new product developments which is a real shame.
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